Brazil’s Finance Minister, Fernando Haddad, proposed that countries around the world unite to tax large fortunes. He stated, “We need to ensure that the billionaires of the world contribute their fair share in taxes. In addition to supporting ongoing negotiations at the OECD [Organization for Economic Cooperation and Development] and the UN [United Nations], we believe that implementing a global minimum tax on wealth could serve as a third pillar of international tax cooperation.”
The resources from taxing the super-rich are planned to be used to finance initiatives of the Global Alliance Against Hunger and Poverty.
The Alliance is one of the priorities of Brazil’s G20 presidency (the group of the 19 largest economies in the world, plus the European Union and the African Union). It consists of a set of measures aimed at mobilizing resources and sharing expertise to eliminate global food insecurity. “In many parts of the world, the super-rich employ various strategies to evade tax systems. This results in a regressive tax structure instead of a progressive one at the top of the income pyramid [where the rich end up paying less],” Haddad stated.
The Finance Minister cited a study by French economist Gabriel Zucman, commissioned by Brazil, which suggests that taxing billionaires at 2% of their wealth could generate up to $250 billion annually.
“This is approximately five times the amount allocated by the ten largest multilateral banks to combat hunger and poverty in 2022,” Haddad noted in comparison.
According to the minister, the Global Alliance operates under the premise that the international community has the capacity to ensure decent living conditions for all.
“What has been lacking is political will. The Alliance aims to catalyze that will,” the minister explained.
“It is imperative that we mobilize to increase international resources to tackle hunger and poverty. We must explore innovative financing instruments for development,” he urged, highlighting examples such as public-private partnerships and reforms in multilateral banks.
Although launched under the G20 framework, the Global Alliance is open to countries outside the group, as well as international organizations. At this stage, the terms are being formalized, paving the way for interested countries to join.
The initiative will be officially presented to G20 member countries at the summit on November 18 and 19, which will also take place in Rio de Janeiro.
Source: Agência Brasil